China Is a 'Huge, Huge Trade': FTSE CEO

Demand for financial products linked to China is on the rise and efforts by the world's second largest economy to further open its capital markets will add to their lure, said Mark Makepeace, CEO of global index provider FTSE Group.

"It [China] is a huge, huge trade. We've got the promise of the QFII [Qualified Institutional Investor Program] allocations [being] multiplied by something like 10 times - that makes it a substantial market," Makepeace told CNBC on Wednesday.

Foreign investors require a license under the qualified foreign institutional investor program, known as QFII, to invest in the country's financial markets. In recent months, China has been taking steps to broaden market access to foreign investors. In January, the head of the China Securities Regulatory Commission said the country could raise the investment quotas for foreign investors by up to 10 times.

This came shortly after a move in mid-December by the country's foreign exchange regulator to raise the limit for foreign sovereign wealth funds and central banks buying Chinese assets through the QFII program.

Demand for China ETFs (exchange traded funds) has been on the rise in recent months, driven by a turnaround in the domestic stock markets, which began in December 2012.

In January, FTSE reported that the combined assets of its ETFs benchmarked to the group's FTSE China A50 Index surpassed $10 billion for the first time. These included the Hong Kong-listed iShares FTSE A50 China ETF and CSOP FTSE China A50 ETF.

Makepeace said FTSE is in talks with regulatory bodies and exchanges in China to include A-shares - yuan-denominated shares traded on the Shanghai and Shenzhen stock exchanges - in the group's global benchmark, the FTSE All-World Index.

"We have got to manage the transition for global investors to invest in the A-share market, it will take 5-10 years but it's a process that we are just beginning," he said.